Question by Where’s my scooby snack?: What’s the difference between a loan modification and normal refinancing?
They sound the same to me. I’m just a little confused. There’s also a second mortgage and short refinance.
Can someone please verify these definitions for me and please advise as to which one would be better?
Answer by sfmca5
It is easy to explain the definitions of the terms; but, to advise you on which one is best for you would take some financial anaylsis.
Loan Modification and Refinancing can sound the same but they are a little different.
Loan Modification: A simple modification to the terms of your original loan or note between you and your current mortgage holder. Example: Modification in interest rate to help you save your home from going into foreclosure.
Refinancing: Remortgaging your loan balance to an entire new loan with your current mortgage holder or a totally different one. Example: Refinancing from a 30 year mortgage to a 15 or refinancing fron an adjustable rate mortgage to a fixed rate.
Second Mortgage: Just that, it is a second position mortgage on your home in addition to the primary or first mortgage.
Short Refinance: Never heard of it.
As I mentioned to advise you on which would be better is impossible without knowing more about your financial situation. I suggest you meet with a loan officer at your bank or credit union and ask them to advise you based upon your current financila situation.
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